Blog 1 : The Meaning And The Importance Of Business Ethics

The Meaning And The Importance

Of Business Ethics

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What Is Business Ethics ?

Business ethics are the set of practices and policies that companies use to guide them through decisions about finances, negotiation , deals, corporate social responsibility, and more. Without a strong set of ethics, a business can run afoul of the law, encounter financial pitfalls and moral dilemmas.

     As a leader, you’ll face many challenges in the workplace because of different interpretations of what's ethical. Situations often require navigating the “gray area,” where it’s unclear what’s right and wrong.

 Why Are Business Ethics Important ?

Failure to understand and apply business ethics can result in moral disengagement. Ethics ensure that a company operates lawfully, safeguarding both employees and the general public. It keep trade honest and fair, uphold manufacturing standards, and prevent false or bogus product claims. Plus, a strong ethical corporate culture fosters, amongst other things, improved performance and prevents employee burnout.

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Just as negative press or rumors even within company  can drive away customers, positive press can draw in new customers.

Business ethics drives employee behavior.

According to the 2018 Global Business Ethics survey, employees are more likely to apply ethical reasoning when their company clearly demonstrates why business ethics is important. Ninety-nine percent of U.S. employees who experience a strong ethics culture said they’re prepared to handle ethical issues. Companies that advocate for business ethics motivate their employees to perform their roles with integrity.

Business ethics play a vital role in a company’s long-term success. Company that has good ethics will operate fairly with others and can earn a company a positive reputation and encourage brand loyalty. Consumers and stakeholders increasingly expect corporations to have strong values.

The importance of business ethics extends beyond simply operating within the boundaries of the law avoid legal and regulatory problems. Moreover most people want to do business with a business that operates fairly. When company exhibits strong ethical behavior it can maintain a positive reputation, both with the public and employees. Once an organization enjoys a good reputation in the marketplace, this good reputation attracts and retains a strong customer base, and maintains a talented workforce, it often sees a payoff in steady or increased revenues.

 

Business Ethics Affect Reputation

Brands are no longer owned only by the companies they represent. Employees, consumers, and stockholders increasingly feel that a brand belongs to them too. That’s why 42 percent of consumers will stop doing business with a company if they disagree with its words or actions on a social issue. And more than 60 percent say their purchasing decisions are driven by a company’s ethical values and authenticity.

 

Business Ethics Set the Tone for Employee Behavior

If the CEO of a company cuts corners to secure a contract and it’s a well-known company secret, it can signal to other employees that financial misbehavior is OK. On the other hand, when leaders display a strong moral compass, it encourages others to do the same. If you want your employees to behave well, you need to treat them well and act in a manner that makes them proud to call you the boss.

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 Ethical Responsibilities to Society

Promoting ethical conduct can benefit both your company and society long term. Prioritizing the "triple bottom line "  is an effective way for your business to fulfill its environmental responsibilities and create long-term value. It focuses on three factors:

·       Profit: The financial return your company generates for shareholders

·       People: How your company affects customers, employees, and stakeholders

·       Planet: Your company’s impact on the planet and environment

Conclusion  

Ethical are the foundations of both personal life and work life. Ethics Business ethics play a vital role in a company’s long-term success. Company that has good ethics will operate fairly with others and can earn a company a positive reputation and encourage brand loyalty. Consumers and stakeholders increasingly expect corporations to have strong values. When company exhibits strong ethical actions, that means your company is maintaining the good reputation. Once an organization has successfully established the norms of ethics, good employees will be able to work with honesty , integrity and positivity. At the end, company will get paid off with higher revenues,  sincere employees and loyal customers. 

      My Reflection and Key takeaway 

   Ethical company is built by honest good owners or top management team. When the Top Management team holds on to the value, no doubt that Top Managers and HR will search for ethical employees who will embrace the same morals as them. When company core value and principles are applied by ethical employees, company will run smoothly without problems that cause surprising operations damages of the business. This results more productivity, fairness, efficiency and transparency in the company.

 

References : 

• Boyles, M. (2023). What Are Business Ethics & Why Are They Important? | HBS Online. [online] Business Insights Blog. Available at: https://online.hbs.edu/blog/post/business-ethics.

• Limestone University (2021). Why Business Ethics Are Important. [online] Limestone University. Available at: https://www.limestone.edu/blog/why-business-ethics-are-important#:~:text=Business%20ethics%20are%20the%20set.

• Marquette. (2023). Why are ethics important in business? [online] Available at: https://online.marquette.edu/business/blog/why-are-ethics-important-in-business.

• ‌Maryville University (2023). The Importance of Business Ethics. [online] Maryville Online. Available at: https://online.maryville.edu/online-masters-degrees/management-and-leadership/careers/importance-of-business-ethics/.

• Ruth Brooks (2022). What Are Business ethics, and Why Do They matter? [online] University of York. Available at: https://online.york.ac.uk/what-are-business-ethics-and-why-do-they-matter/.‌

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